# GG-12: Monetary Transmission Data Investigation

The monetary paper (Paper 12) found that demographics amplify monetary
transmission at short horizons (h=1-2): Z₁×Δrate is significant.
This is the 'demographic paradox' — aging should weaken transmission
but empirically amplifies it. Better data would help resolve this.

## Available Rate Data

| Variable | Obs | Countries | Year Range |
|---|---|---|---|
| govt_bond_10y | 1018 | 23 | 1970-2024 |
| real_bond_10y | 907 | 23 | 1980-2024 |
| short_rate_3m | 983 | 23 | 1970-2024 |
| policy_rate | 2029 | 81 | 1970-2024 |
| lending_rate | 4225 | 132 | 1970-2024 |

## Z₁ on Rate Changes (First-Difference)

| DV | Z₁ | p-value | N | Countries |
|---|---|---|---|---|
| Δgovt_bond_10y | 5.662* | 0.0538 | 995 | 23 |
| Δshort_rate_3m | 2.890 | 0.5019 | 960 | 23 |
| Δpolicy_rate | -5.489 | 0.2907 | 1940 | 81 |

## Transmission Amplification: Z₁ × Δrate → CA

Z₁×Δpolicy_rate → CA: -0.02 (p=0.3056, N=1866)

## Data Gaps and Recommendations

- **Policy rates**: Only 2,029 obs across limited countries. Need BIS policy rate database for broader coverage.
- **Transmission mechanism**: Need output gap or IP data at quarterly frequency to test h=1-2 horizon properly.
- **Current test uses annual data**: The 'demographic paradox' (amplification at h=1-2) is inherently a short-horizon result. Annual panels may miss the dynamics.
- **Recommendation**: The monetary transmission amplification finding is best treated as a puzzle to motivate future work with quarterly data, not a confirmed result.